Understanding Multiple Time Frame Analysis (MTFA)_7. Combining All Three

Lesson 7: Combining All Three When you put all three time frames together to analyze a certain currency pair, your chances of winning a trade will increase. Performing the top-down analysis promotes trading with fairly bigger trends. As a matter of fact, this alone minimizes risk as the odds of price action eventually continuing on the longer trend, go up. Taking this theory into consideration, optimism in a trade should be measured by how the time frames are arranged. If the larger trend, for instance, is leaning on the upside. If the larger trend for instance, is leaning on the upside but the medium and short trends are leaning on the downside, cautious shorts must be used with practical profit targets and stops. On the other hand, you have the option to wait until a bearish wave heads toward lower frequency charts and tries to go long at a good level when the three time frames align once more. Including various time frames to examine trades also enables you to spot support and resistance readings as well as solid entry and exit levels. Your likelihood of succeeding grows further when it is followed on a short-term chart thanks to your ability to steer clear of weak entry prices, poorly positioned stops, and/or irrational targets.